Redrow has crumbled nearly 6% after an attempt to buy the housebuilder by its founder collapsed after the market closed on Thursday.

Steve Morgan and a consortium including Redrow's second largest shareholder Toscafund had offered 152p a share for the business, valuing it at £562m. But other investors believed the price was two low, and there was talk a new offer of between 165p and 170p was being considered.

But after the takeover panel extended the original bid deadline twice, no agreement could be reached and the discussions were terminated.

Redrow shares are currently down 9.5p at 153p, still above the offer that had been on the table.

Morgan - who also owns Wolverhampton Wanderers football club - left Redrow in 2000 but returned nine years later after a boardroom coup, and has since helped turned the business around. Analyst Charlie Campbell at Liberum Capital said he was very surprised that Morgan had walked away:

By my reckoning, the stock was about 140p in the week before indicative offer (152p made on 31 August) and sector is up 16% since then (although part of that was in sympathy with the bid), so current price is justifiable on the sector rally alone. But I would think shares are supported at the 152p level (about one times book value).

Mark Hughes at Panmure Gordon agreed that 152p was a fair valuation:

We do not believe other bidders will emerge in the coming days given the Steve Morgan specific nature of the bid.